U.S. Fed Chief Sees Continued Cuts in Economic Stimulus

The new chief of the U.S. central bank says policy makers are likely to curb their direct support of the American economy in the coming months if the world's largest economy continues to advance.

Federal Reserve Chair Janet Yellen said Tuesday the bank will probably continue to cut its purchase of billions of dollars of securities in "further measured steps," but has not set a timetable. The Fed has already trimmed the purchases from $85 billion a month to $65 billion.

She offered her thoughts in her initial congressional appearance since becoming the first woman to head the century-old bank.

Yellen said she expects "a great deal of continuity" in Fed policies after taking over earlier this month from long-time Fed chairman Ben Bernanke.

Yellen said the U.S. economic recovery "gained greater traction" in the second half of 2013, and noted that more than three million jobs have been added since the Fed embarked on its asset purchases in September 2012.

But in the past two months U.S. job growth has slowed, even as the jobless rate has dipped to 6.6 percent, a five-year low.

The new Fed chief said "the recovery in the labor market is far from complete," and that too many workers have been jobless for extended periods.

"Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high," said Yellen.

She also said that the country's inflation rate is below the two percent target set by the bank's policy makers and that the country's financial regulatory reforms still need to completed.